The Haskins Company manufacturs and sells radios. The Haskins Company expects to sell 25,100 units of...

The Haskins Company manufacturs and sells radios. The Haskins Company expects to sell 25,100 units of its product at $11.10 per unit and to incur variable costs per unit of $6.10. Total fixed costs are $71,000. The total contribution margin for Haskins Company is:

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Expert Solution

Total Contribution margin for Haskins Company is $125,500.

The total contribution margin generated by an entity represents the total earnings available to pay for fixed expenses and to generate a profit.

The Total contribution margin = Total sales - Total variable cost (or) Fixed Cost + Profit.

Units	Per unit	25100 unit
Selling Price	$ 11.10	$ 2,78,610
Variable cost	$ 6.10	$ 1,53,110
Contribution	$ 5.00	$ 1,25,500
Fixed cost		$ 71,000
Profit		$ 54,500

Contribution Margin Per unit =	Selling price - Variable cost
	= $11.10 - $6.10
	$5

Total Contribution Margin =	Total Sales - Total Variable cost
	= $278,610 - $153,110
	$125,500

Total Contribution Margin =	Total Fixed cost + Profit
	= $71,000 + $54,500
	$125,500

Contribution Margin Ratio =	Contribution/Selling price
	= $ 5 /$ 11.10
		45.05%

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ekkarill92 answered 1 year ago

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